SeaWorld Entertainment (SEAS): Peak Season Attendance Declining

   20 Jun 2014

Metrics Unanmously Indicating Lower Interest in Visiting Sea World Parks

We believed a delayed spring break and minor pent up demand from poor weather created transient improvements in attendance during late April(as noted by management) that were not sustainable. Our online composite indicated that by Memorial Day weekend and throughout critical peak season interest in SeaWorld was dramatically lower than a year ago. Tourists across the country were searching for Sea World related terms much less than a year ago with YoY trends slipping during peak attendance season.

Additionally, consumers were visiting the Sea World family of websites about 20% less than a year ago. We detected increased promotional activity and more coupons/Groupons compared with a year ago. Our analysis looked at a combination of the San Diego, Orlando and San Antonio parks. With peak season June and July complete, we saw little opportunity for improvement. Our model implying lower attendance and average ticket prices projected a FY 14 revenue shortfall of nearly $100mm. Our analysis proved correct as management’s early April guidance extrapolating short term improvements for the entire season proved too optimistic.

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